About the Net Investment Income Tax (NIIT) Calculator
This net investment income tax calculator works out the 3.8% NIIT (Form 8960) that applies to investment income for higher earners. Enter your filing status, modified adjusted gross income and each type of investment income; it finds the smaller of your net investment income and the amount your MAGI exceeds the threshold, and applies 3.8% to that.
It is useful when planning a large capital gain such as a home or stock sale, deciding when to realise gains, estimating quarterly tax payments, or checking whether rental income will push you into the surtax. Because the tax only hits the smaller of the two amounts, many people over the threshold pay NIIT on only part of their investment income.
The thresholds, which apply for 2026 and have been set by law since 2013 with no inflation adjustment, are: $200,000 for single and head of household, $250,000 for married filing jointly (and qualifying surviving spouses) and $125,000 for married filing separately. Wages, tax-exempt municipal bond interest, IRA and 401(k) distributions, Social Security and income from a business you actively run are not net investment income.
With the default inputs, the net investment income tax is $2,280.00. Change any value above to recalculate instantly.
How to use the net investment income tax (niit) calculator
- 1Choose your filing status.
- 2Enter your modified adjusted gross income for the year.
- 3Enter interest, dividends, capital gains, rental and passive income.
- 4Subtract investment expenses such as margin interest and advisory fees.
- 5Read the NIIT due and how much of your income it applies to.
Formula and method
Net investment income (NII) is gross investment income — interest, dividends, capital gains, rents, royalties, non-qualified annuities and income from passive businesses — minus properly allocable deductions such as investment interest expense, advisory fees and the share of state income tax on that income.
The tax is 3.8% of whichever is smaller: your NII, or the amount by which modified adjusted gross income exceeds the statutory threshold for your filing status. So someone just over the threshold pays NIIT on only a small slice, while someone far above it pays on all of their investment income. Estates and trusts use a different, much lower threshold and are not covered here.
- NII
- Net investment income after allocable expenses
- MAGI
- Modified adjusted gross income
- Threshold
- $200,000 single/HOH, $250,000 joint, $125,000 separate
Worked examples
Single filer with $260,000 MAGI
Investment income is $70,000 less $2,000 of expenses = $68,000. MAGI exceeds $200,000 by $60,000, which is smaller, so NIIT is 3.8% × $60,000 = $2,280.
Married couple just over the threshold
The joint threshold is $250,000, so only $50,000 of the $68,000 of investment income is taxed: 3.8% × $50,000 = $1,900.
Married couple below the threshold
MAGI of $240,000 is under the $250,000 joint threshold, so no NIIT is due even with $68,000 of investment income.
Large stock sale
MAGI is $300,000 over the threshold — more than the $120,000 of investment income — so all of it is taxed: 3.8% × $120,000 = $4,560.
Frequently asked questions
What income is subject to the 3.8% NIIT?+
Interest, dividends, capital gains, rental and royalty income, non-qualified annuities, and income from passive businesses or trading in financial instruments. Wages and self-employment income are not NII.
Are the NIIT thresholds indexed for inflation?+
No. The $200,000, $250,000 and $125,000 thresholds have been fixed since the tax began in 2013, so more households cross them each year as incomes rise.
Does the NIIT apply when I sell my home?+
Only on the taxable part of the gain. The $250,000 ($500,000 joint) exclusion for a main home is not NII, but any gain above the exclusion is, as is the whole gain on a second home or rental.
Is municipal bond interest subject to NIIT?+
No. Tax-exempt interest is excluded from NII and is not part of MAGI, which is one reason munis appeal to high earners. Distributions from IRAs and 401(k)s are not NII either, although taxable distributions still count in MAGI and can push you over the threshold.
How do I pay the net investment income tax?+
NIIT is calculated on IRS Form 8960 and added to your total tax on Form 1040. Include it in estimated payments or withholding to avoid an underpayment penalty.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.